World markets soar as Greece crisis eases

Blue-chip stocks on Wall Street posted their biggest gains in more than two months, as signs of progress in Greece's debt crisis sparked a broad market rally around the world.

While the rally subsided later in the session, at its peak the Dow Jones Industrial Average rose 145 points, its biggest intra-day gain since April 20.

Sharemarkets in Asia and Europe also surged after German banks agreed in principle to roll over about $US10 billion in Greek government debt.

As expected, deputies (MPs) in the Greek Parliament by a five-vote majority approved a five-year austerity plan as a condition for a new bailout, erasing fears that a failed package would spark a default.

Meanwhile, a mixed batch of US economic data showed home prices rose in April from a month earlier, the first increase in eight months. But a June consumer-confidence reading was slightly lower than May's, disappointing expectations.

At the close (8am NZ time), the Dow was up 73.33 points, or 0.6% to 12,262.02. The S&P 500 index gained 0.8%, to 1307.49, while the technology-oriented Nasdaq Composite advanced 0.4%, to 2740.49.

Other markets: Europe, Asia up
European stocks rose on increased optimism that a solution would be found to Greece's debt problems.

The pan-European Stoxx 600 index rose 0.5% to close at 265.23. In Greece, Athens' ASE index jumped 2.7% to 1258.84.

The UK's FTSE 100 rose 0.8% to 5766.88, its third consecutive gain. Germany's DAX gained 0.9% to 7170.43 and France's CAC-40 climbed 1.5% to 3851.89.

Asian stocks surged on rising expectations that Greece would be able to avoid a default, though shares in China and Hong Kong were held back by concerns Beijing will tighten monetary policy further.

It was the second straight day of broad stock advances in much of the Asian-Pacific region ahead of the Greek vote.

In Tokyo, Nikkei Stock Average surged 1.5% to 9797.26 but in China, the Shanghai Composite Index shed 1.1% to 2728.48.

In Seoul, the Kospi climbed 1.5% to 2094.42, in Sydney, the S&P/ASX 200 index rose 1.2% to 4529.50 and in Mumbai, the Sensex rose 1.1% to 18,693.86, the highest close since May 2.

Commodities: Oil, gold rise
Crude futures rose above $US95 a barrel after a government report showed a surprise drop in US oil inventories.

The report sent crude prices up in New York, nearly wiping out the recent price decline after the International Energy Agency's decision last week to call for the release of 60 million barrels from member countries' strategic oil reserves.

Light, sweet crude for August delivery traded $US2.61, or 2.8%, higher at $US95.50 a barrel. Brent crude on the ICE futures exchange traded $US2.77 higher at $US111.55 a barrel.

Gold futures rose, with the most actively traded contract, for August delivery, settling $US10.20, or 0.7%, higher, at $US1510.40 an ounce in New York.

Currencies: Euro rises on Greek vote
The euro pared its gains against the US dollar after the Greek parliament approved conditions for a new debt bailout.

The euro was at $US1.4421 from a high of about $US1.4445 just before Greece's parliament voted in favour of the €28 billion austerity plan and a related €50 billion privatisation plan. The euro was at $1.4371 late on Tuesday.

The dollar was at ¥80.89 compared with ¥81.13 late on Tuesday, while the euro was at ¥116.64 compared to ¥116.56.

The UK pound traded at $US1.6059 compared with $US1.6000.